A Community for Fraud Prevention Professionals

Main menu

Post navigation

Procurement Fraud – A Revolving Door of Abuse?

I recently studied one of the many procurement fraud cases (US v. Khan) associated with the LOGCAP III contract, and came away with mixed feelings. On the one hand, I saw groups such as the relatively recently formed National Procurement Fraud Task Force (NPFTF) and Defense Contract Audit Agency (DCAA) perform in stellar fashion. On the other hand, the Army, disappointingly, seems to keep a revolving door culture for vendors who have abused them in the past.

Kellogg, Brown & Root (KBR) was responsible for the kickback fraud that occurred in the US v. Khan case (Tamimi was the subcontractor used), and has been the focus of many other cases of procurement fraud within the LOGCAP project. According to an article in the FederalTimes.com from March of this year:

Since combat operations began in 2001, DCAA has referred to criminal investigators 32 cases of suspected fraud that were associated with all wartime-support contracts. Of those, the “vast majority” related to the Logistics Civil Augmentation Program (LOGCAP).

In an effort to avoid the many potential pitfalls (and fraud) associated with single-vendor contracts, the Army chose wisely to break up LOGCAP IV services across 3 separate vendors. However, guess who one of the vendors is?

You guessed it. KBR.

This has to make agents within the DCAA and NPFTF wonder who is on whose side in the war against government procurement fraud.

I would recommend any vendor responsible for fraud – including any sub-contractors it uses to provide services – be banned from servicing government contracts in the future. How many cases will it take, and how much lost taxpayer money will it cost, before such logical restrictions are put in place?

Unfortunately, this is one of the many topics that doesn’t hit the limelight in the media, and consequently does not appear on the radar of the common citizen. Does the common citizen in America today have any idea of the taxpayer dollars being spent on government procurement services? What about the money being squandered in fraud? What about the Army’s stance on allowing past vendors who have proved themselves incapable of proper contract management to handle new contracts again, and again?

And how is it that 100’s of millions of dollars can be spent in bonuses to vendors and sub-contractors for getting projects done on time, yet hundreds of critical positions (such as those put in place to watch over contract management) be left unfilled?

For a moment, disregard the limelight and costs associated with things “in the news” such as the health care issue and take a look at the billions of dollars wasted annually on poorly managed government contracts. Will these issues ever receive focus from the executive, or are they not romantic enough for the attention required? Is it too late to make a change?